If getting insights from data analysis is good for an organization’s internal purposes, it’s even better when insights are shared with outside stakeholders, such as customers and partners.
Sometimes the term “monetizing data” is used to describe this concept, but it may be a bit misleading. For one thing, it brings to mind the practice of selling customer data such as mailing lists, which usually is not what it’s about. A better term is “information-based products and services.” While sharing data and analytical insights with customers may involve getting paid in return, the value also may be realized in the form of loyalty, lower warranty costs or smoother relationships.
For instance, this CGI white paper on “Modeling the Relationship between Driving Behavior and Fuel Consumption,” describes how a truck manufacturing client developed a new service line by analyzing telematics data. The company now offers data analysis and training to their customers to help them benefit from these insights.
Here are more examples to shed light on the concept of information-based products and services:
- A credit reporting agency gives consumers access, for a fee, to the same credit histories and scores that lenders will see when evaluating them for a loan.
- An engine manufacturer gathers streaming data on performance and condition from sensors in its products, then sends customers detailed summaries and alerts.
- A pricing analytics company offers a subscription to an index of price sensitivity, which changes frequently according to economic trends. Customers use the index values to fine-tune their strategies.
When planning a program to monetize data by creating an information-based product or service, key considerations include:
- What is the impact on customers or citizens? Will the offer be seen as a completely good thing, or will it cross the “creepy” line, where users view the data use as “going too far”?
- Are there government regulations or industry self-regulation rules that apply?
- Is the offer something for which you can easily charge, or for which customers will be willing to pay?
- Do you have the technology capabilities already in place to realize the idea, or will there be a new platform needed, such as a cloud-based information distribution system?
- Is the value coming from raw data that’s made available, or are you adding value to the data with metrics, indices, visualization or analytical insights?
- Which channels will work best – web, mobile, social or all?
Numerous businesses are adding information-based services to increase the value of their customer relationships. Government entities of all types are also starting to create similar services to help achieve their missions and create value for constituents in areas such as financial transparency and public safety.
This is a trend that has a long way to run.